57 per cent of overseas high-net-worth individuals (HNWI) name London real estate as their top target investment class, according to Cluttons, international property consultants and chartered surveyors, in association with VPC Asia Pacific, as it launches the Cluttons International Private Capital Survey 2012.
Global appetite for both London residential and commercial real estate assets has seen an upturn in the last 12 months with overseas investors (both institutional and individual) contributing almost 90 per cent in recent commercial asset transactions.
However, headline reports of ‘safe haven London throughout the global economic crisis’ although not inaccurate should not be overplayed. According to Cluttons, 86 per cent of HNWI pinpointing London as their top investment city already have strong ties to the UK whether through second homes, children’s education or expansion of existing investment portfolio. London has always been a solid investment choice.
71 per cent of HNWI surveyed said they were planning investment activity in the next three to six months in their first choice target city. And at over two-thirds higher than last year, investors stated that the target city will be outside their domestic market.
Those well-seasoned Middle Eastern investors interviewed identified London as their first choice city. In particular, HNWI from Dubai and Manama (Bahrain) were continuing to look at prime Central London residential as the obvious target location.
Growing demand pressure on this scarce asset class will drive values up further. 57 per cent of HNWI surveyed cited strong capital growth as the primary appeal; the rapid recovery of Central London residential from the impact of the global credit crunch is a key factor influencing investment decisions.
Investors surveyed in Kuala Lumpur and Singapore also identified Central London residential as their primary offshore investment target. While HNWI in Bangkok ranked London behind Yangon (Myanmar), Indonesian wealthy private investors were still looking to Singaporean and Australian residential before considering London.
Bill Siegle, senior partner, Cluttons, said:
“This new survey from Cluttons takes a unique insight into the ‘live’ investment intentions of HNWI across the Middle East and Asia Pacific regions. Quite remarkably, 43 per cent of these highly mobile investors state that the global financial crisis has had no impact on their view of London as a top investment target location. In fact, almost a third (29 per cent) goes on to claim that London is better-placed because of the Eurozone difficulties.
“Cluttons’ global view is that there remains no room for complacency. Private individuals in Dubai felt there would be less outflows of capital from the United Arab Emirates over the next 12 to 18 months as the UAE’s economic recovery gains momentum. Furthermore, the bulk of Asia Pacific HNWI increasingly are expected to look at their home markets more favourably.
“The fundamentals of the London economy remain strong; the city attracts dynamic businesses and skilled professionals from around the globe. This gravity effect underpins the city’s appeal to wealthy individuals looking for investment opportunities in the next 12 months.”